Excessive CEO Pay: Background and Policy Approaches (CRS Report for Congress)
| Release Date |
Revised Nov. 29, 2007 |
| Report Number |
RS22604 |
| Report Type |
Report |
| Authors |
Gary Shorter and Mark Jickling, Government and Finance Division; Alison A. Raab, Knowledge Services Group |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
Supporters of current CEO pay levels argue that executive compensation is determinedby normal private market bargaining, that rising pay reflects competition for a limitednumber of qualified candidates, and that even the richest pay packages are a bargaincompared with the billions in shareholder wealth that successful CEOs create. Others,however, view executive pay as excessive. Some see a social equity problem, takingCEO pay as symptomatic of a troublesome rise in income and wealth inequality. Otherssee excessive pay as a form of shareholder abuse made possible by weak corporategovernance structures and a lack of clear, comprehensive disclosure of the variouscomponents of executive compensation. This report describes the major legislative andregulatory proposals that have sought to remedy these perceived problems, includingH.R. 1257 (Representative Frank), which the House passed on April 19, 2007, andwould require that CEO pay packages be put to a nonbinding shareholder vote. S. 1181(Senator Obama), a companion bill, was subsequently introduced in the Senate.
